Daily Market Outlook, January 28, 2026
Daily Market Outlook, January 28, 2026
Patrick Munnelly, Partner: Market Strategy, Tickmill Group
Munnelly’s Macro Minute…
The financial markets are certainly paying attention to Donald Trump. After a prolonged period of calm in the foreign exchange space, the currency market has been jolted awake by a surge in dollar selling. When Trump casually remarked that the dollar was "doing great", it set off a chain reaction. What started as steady selling quickly escalated into a full-blown sell-off, pushing the euro above $1.20 for the first time in over four and a half years and driving the Swiss franc to its strongest level in a decade. Gold soared to an all-time high, surpassing $5,200 per ounce, continuing its swift climb driven by the declining strength of the Dollar. Although there’s been a slight recovery, the risks tied to holding dollars in the Trump era are becoming increasingly apparent. Geopolitical tensions, Trump’s economic policies, Washington’s preference for a weaker exchange rate, and concerns about the Federal Reserve's independence all contributed to the dollar index dropping by more than 9% last year. Now, with fresh concerns over Trump’s controversial Greenland diplomacy and whispers that the U.S. might intervene in currency markets to support Japan’s yen, investors are feeling the pressure to hedge their bets.
U.S. stocks hit record highs on strong corporate earnings, while the dollar plunged to a near four-year low. The S&P 500 extended its five-session rally, nearing the 7,000 mark despite weaker consumer confidence. UPS boosted sentiment with an optimistic outlook. Conversely, UnitedHealth dragged insurers down after a grim forecast and a U.S. proposal to keep private Medicare payments unchanged next year. Nasdaq futures climbed as ASML reported stronger-than-expected Q4 bookings of €13.2 billion ($15.8 billion), up from €5.4 billion in Q3 and surpassing analyst estimates of €6.32 billion (Visible Alpha). ASML attributed the surge to increased AI chipmaking investments, with CEO Christophe Fouquet citing robust medium-term AI demand. The boost comes as major chipmakers ramp up spending to meet rising AI-related needs from cloud giants like Microsoft, Amazon, and Google. Global stocks are on their longest winning streak in a month, driven by Asian technology equities hitting record highs. The Dollar has stabilised after recent lows caused by US policy concerns. The MSCI All Country World Index rose 0.2%, nearing a record, while US equity futures signalled more gains following the S&P 500's new high. SoftBank's potential $30 billion investment in OpenAI boosted Nasdaq 100 futures. Asian stocks climbed 1.1%, led by a regional tech index, though European shares faced slight declines. Stocks rebounded from April lows due to lower interest rates and optimism around AI investments. Key tests loom with the Fed's policy decision and tech giants reporting earnings Wednesday.
The FOMC meeting decision later today is expected to see the committee hold rates steady at 3.50-3.75% after three precautionary cuts aimed at labour market risks. Economic risks now appear more balanced, with hawks focusing on inflation concerns and improved business survey data, though consumer confidence remains weak. Market expectations for the next rate cut have shifted to July, beyond Powell’s term ending in May. At the press conference, Powell will address the Fed's economic outlook and likely face questions about the DOJ subpoena tied to the Fed's refusal to lower rates under White House pressure. While Powell may navigate political challenges, President Trump’s upcoming Fed Chair nominee announcement could bring further criticism, potentially spurred by Powell signalling a Fed pause.
Overnight Headlines
Bank Of Canada Set To Hold Rates Near ‘Right Level’
FOMC Poised For Pause As Markets Look To Powell For Signals
Trump’s Embrace Of Weaker Dollar Fuels Bets On New Downtrend
Euro Rallies Above $1.20 On Broad Dollar Weakness, Trump Remarks
Austria’s CBank Gov: ECB Would Need To Act If Euro Keeps Gaining
Gold Jumps Over 3% To Record As Uncertainty Fuels Safe-Haven Bids
Investors Bet On ‘Hot’ US Economy Heading Into Midterm Elections
Samsung, SK Hynix Results To Showcase Fight For AI Memory Crown
China Allows Import Of First Batch Of Nvidia's H200 AI Chips
Texas Instruments Gives Solid Outlook After Chip Demand Picks Up
SoftBank In Talks To Invest $30B More In OpenAI, Report Says
Anthropic Closes Latest Funding Round Above $10B, Sources Say
Australia Monthly Inflation Beats Estimate, Lifts Rate-Hike Case
BoJ Members Agree On Need To Continue Raising Rates, Minutes Show
UK Pledges AI Training For All To Grasp $193B Opportunity
FX Options Expiries For 10am New York Cut
(1BLN+ represents larger expiries and is more magnetic when trading within the daily ATR.)
EUR/USD: 1.1900 (860M), 1.2100 (868M)
USD/CHF: 0.7750 (265M). USD/CAD: 1.3580 (180M)
EUR/GBP: 0.8600 (976M), 0.8700 (528M), 0.8715 (165M)
USD/JPY: 151.67 (422M) . EUR/JPY: 180.50 (295M)
CFTC Positions as of January 23rd:
Equity fund speculators have reduced their S&P 500 CME net short position by 48,733 contracts, bringing it down to 400,381. Meanwhile, equity fund managers have decreased their S&P 500 CME net long position by 49,679 contracts, resulting in a total of 882,629 contracts.
Speculators have cut their net short position in CBOT US 5-year Treasury futures by 132,601 contracts to 2,136,519 and have also trimmed the CBOT US 10-year Treasury futures net short position by 214,865 contracts to 655,640. The CBOT US 2-year Treasury futures net short position has been reduced by 79,758 contracts to 1,225,122. In contrast, speculators have raised their CBOT US UltraBond Treasury futures net short position by 23,725 contracts, now totaling 258,822. Additionally, speculators have shifted CBOT US Treasury bonds futures to a net short position of 23,070 contracts, compared to 13,835 net longs the previous week.
The current Bitcoin net long position stands at 298 contracts, while the Swiss franc has a net short position of -43,207 contracts. The British pound is showing a net short position of -21,980 contracts, and the Euro has a net long position of 111,695 contracts. Finally, the Japanese yen reflects a net short position of -44,829 contracts.
Technical & Trade Views
SP500
Daily VWAP Bullish
Weekly VWAP Bearish
Above 6970 Target 7050
Below 6930 Target 6890
EURUSD
Daily VWAP Bullish
Weekly VWAP Bullish
Above 1.1950 Target 1.2150
Below 1.1750 Target 1.1615
GBPUSD
Daily VWAP Bullish
Weekly VWAP Bullish
Above 1.3770 Target 13950
Below 1.3430 Target 1.3290
USDJPY
Daily VWAP Bearish
Weekly VWAP Bearish
Above 154.35 Target 156
Below 153.50 Target 151
XAUUSD
Daily VWAP Bullish
Weekly VWAP Bullish
Above 5200 Target 5500
Below 5069 Target 4950
BTCUSD
Daily VWAP Bullish
Weekly VWAP Bearish
Above 90.5k Target 92k
Below 90k Target 84.3k
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Past performance is not indicative of future results.
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Patrick has been involved in the financial markets for well over a decade as a self-educated professional trader and money manager. Flitting between the roles of market commentator, analyst and mentor, Patrick has improved the technical skills and psychological stance of literally hundreds of traders – coaching them to become savvy market operators!